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USDA Oilseed: World Markets and Trade


11 March 2012

USDA Oilseed: World Markets and Trade - March 2012USDA Oilseed: World Markets and Trade - March 2012

U.S. soybean prices have risen sharply, especially since mid-January, coinciding with a nearly 12 million ton drop in South American production over the past two months. However, prices remain $20 to $30/ton below year-ago levels on somewhat weaker demand.
USDA Oilseed: World Markets and Trade

U.S Soybean Prices Climb from Mid-December Lows

U.S. soybean prices have risen sharply, especially since mid-January, coinciding with a nearly 12 million ton drop in South American production over the past two months.

However, prices remain $20 to $30/ton below year-ago levels on somewhat weaker demand. This year’s price rise contrasts with the pattern of price movement over the previous three years. Typically, we see erosion in price support that coincides with the Brazilian harvest.

Even in 2009 when dry weather impacted the South American crops, prices still came down. The fact that prices rose this year reflects the greater impact that dry weather apparently has had on Brazil’s crop, even though total South American crop losses are much less than experienced in 2009.

With much of the South American drought now factored into the soybean price, further price movements will likely depend on other factors, most notably U.S. planting intentions and early season U.S. weather trends.

OVERVIEW

Global soybean trade is lowered as the pace of imports in major buying countries is slower than anticipated, while forecast exports by Brazil and Paraguay are further reduced due to deteriorating crop prospects. World import demand for soybean meal and oil is marginally down. U.S. season average farm price is forecast at a record.

SOYBEAN PRICES

U.S. export bids, FOB Gulf, in February averaged $492 per ton, up $23 from last month. The strength is partly attributed to recent increases in sales mainly to China.

As of the week-ending March 1, U.S. soybean commitments (outstanding sales plus accumulated exports) to China totaled 20.0 million tons, compared to 24.9 million a year ago. Total commitments to the world are 29.9 million tons compared to 39.8 million for the same period last year.

2011/12 TRADE OUTLOOK

  • Brazil’s soybean exports are cut 900,000 tons to 36.9 million on reduced production and strong demand by domestic processors.
  • Paraguay’s soybean exports are lowered 1.0 million tons to 4.0 million on a reduced crop.
  • To reflect reduced availabilities in exporting countries and slower than anticipated import paces, China’s soybean imports are cut 500,000 tons to 55.0 million, EU-27 imports are cut 500,000 tons to 11.0 million. Japan’s and Indonesia’s soybean imports are lowered 150,000 tons each to 2.7 million and 1.8 million, respectively.

March 2012

Published by USDA Foreign Agricultural Service

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